THE SECOND IN A SERIES OF STUDIES OF THE PROCESSES BY WHICH RESOURCES IN THE UNITED STATES ARE ALLOCATED TO THE SUPPORT OF PUBLIC EDUCATION IS PRESENTED. A RATIONALE FOR THE STUDY OF SCHOOL FINANCE WAS FORMULATED AND APPLIED TO EXPLAIN VARIATIONS IN EXPENDITURES ASSOCIATED WITH STATE EFFORTS TO EQUALIZE BOTH EDUCATIONAL BENEFITS AND TAX LOADS. EXPLORATIONS OF THE INTERACTION OF WEALTH AND EXPENDITURES FOR EDUCATION WERE MADE USING THREE MODELS. AN ANALYSIS OF FISCAL INDEPENDENCE VS. DEPENDENCE IN THE RELATIONSHIPS OF LOCAL SCHOOL DISTRICTS TO OTHER GOVERNMENTAL AGENCIES IS PRESENTED. THE STUDY RECOGNIZES THAT HIGHER LEVELS OF PROPERTY VALUATION AND INCOME RESULT IN HIGHER LEVELS OF EXPENDITURE FOR EDUCATION, BUT THAT EDUCATION PRODUCES A MORE EFFICIENT LABOR FORCE AND HIGHER LEVELS OF PERSONAL INCOME. NUMEROUS TABLES AND CHARTS ARE APPENDED.